Employment and Your Mortgage Application

Your employment is one of the basic parts of your mortgage application.

There are many factors a mortgage lender will use to evaluate your employment and your employment history.

Issues with your employment may hold up your mortgage application or cause it to be rejected.

It is important to know this to make sure you don’t run into problems yourself.

Basics

Lenders look at your employment in the following way:

Experience
Employment history
Job type
Ability to document employment
Experience

Your work experience can be important to making a case that your mortgage application is strong.

The more experience you have in the particular field you are in now, the better off you will be.

Lenders will compare your current job title to past positions. Being in the same line of work for a while (at least two years) helps.

If you have been on the same job for 2 years continuously (no employment gaps) and in the same line of work for 10 years the lender will view you as someone who has been successfully employed in your line of work and more likely to have financial stability.

Employment History

Your employment history for the past two years is usually important to the lender.

It is important to be able to show a continuous record of employment, if possible.

Lenders like to see job stability.

If there are extenuating circumstances a lender may ask for a letter of explanation. This may include medical problems.

Job Type

Your title or position needs to be consistent with the amount of income you are claiming.

Many lenders offer wide leeway in this area, but some do not.

It often depends on the individual underwriter’s discretion.

If you are doing a "stated income" mortgage where you are not documenting your income your stated income on your application should match with your job title.

Often times an applicant may give a title that is outdated or incorrect. Double check on your job title if you need to.

Ability To Document Employment

Some people have a difficult time documenting their employment. This may be for a variety of reasons.

Lenders can ask for:

pay stubs and tax records
a written verification of employment
a phone verification of employment
no employment verification
The options a lender offers depends on the lender you are working with, or the loan option you are looking for.

Summary

Your employment can be a critical part of your mortgage application.

Having a difficult time documenting your current income doesn’t have to stop you from getting a mortgage or refinancing your property.